Table of Contents
- Final Return
- Line 1—Tier 1 Employer Tax
- Line 2—Tier 1 Employer Medicare Tax
- Line 3—Tier 2 Employer Tax
- Line 4—Tier 1 Employee Tax
- Line 5—Tier 1 Employee Medicare Tax
- Line 6—Tier 1 Employee Additional Medicare Tax Withholding
- Line 7—Tier 2 Employee Tax
- Lines 8–12—Tier 1 Taxes on Sick Pay
- Line 13—Total Tax Based on Compensation
- Line 14—Adjustments to Taxes Based on Compensation
- Line 15—Total Railroad Retirement Taxes Based on Compensation
- Line 16—Total Deposits for the Year
- Line 17—Balance Due
- Line 18—Overpayment
- Part II. Record of Railroad Retirement Tax Liability
- Third-Party Designee
- Who Must Sign
- Paid Preparer Use Only
If you stop paying taxable compensation and won't have to file Form CT-1 in the future, you must file a final return and check the final return box at the top of Form CT-1 under “2016.” The final return should be accompanied by a statement providing the last date on which you paid compensation that you reported on Form CT-1, the address at which the records for your Forms CT-1 will be kept, and the name of the person keeping the records. If the business has been transferred to another person, the statement should include the name and address of the transferee and the date of the transfer. If the business wasn't transferred or the transferee isn't known, the statement should so state.
Enter the compensation (other than tips and sick pay) subject to Tier 1 Employer tax in the Compensation column. Multiply by 6.2% and enter the result in the Tax column. The total amount listed in the Compensation column for lines 1 and 8 combined may not be more than $118,500 per employee.
Enter the compensation (other than tips and sick pay) subject to Tier 1 Employer Medicare tax in the Compensation column. Multiply by 1.45% and enter the result in the Tax column.
Enter the compensation (other than tips) subject to Tier 2 Employer tax in the Compensation column. Don't enter more than $88,200 per employee. Multiply by 13.1% and enter the result in the Tax column.
Enter the compensation, including tips reported (but excluding sick pay), subject to Tier 1 Employee tax in the Compensation column. Multiply by 6.2% and enter the result in the Tax column. The total amount listed in the Compensation column for lines 4 and 10 combined may not be more than $118,500 per employee.
Stop collecting the 6.2% Tier 1 Employee tax when the employee's compensation (including sick pay) and tips reach the maximum for the year ($118,500 for 2016). However, your liability for Tier 1 Employer tax on compensation continues until the compensation (including sick pay), but not including tips, totals $118,500 for the year.
Enter the compensation, including tips reported (but excluding sick pay), subject to Tier 1 Employee Medicare tax in the Compensation column. Multiply by 1.45% and enter the result in the Tax column. For information on reporting tips, see Tips, earlier.
Enter the compensation, including tips reported (but excluding sick pay) that is subject to Tier 1 Employee Additional Medicare Tax withholding. You’re required to begin withholding Tier 1 Employee Additional Medicare Tax in the pay period in which you pay compensation in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. Tier 1 Employee Additional Medicare Tax is only imposed on the employee. There is no employer share of Tier 1 Additional Medicare Tax. All compensation (including sick pay) that is subject to Tier 1 Medicare tax is subject to Tier 1 Employee Additional Medicare Tax if paid in excess of the $200,000 withholding threshold.
Visit IRS.gov and enter “Additional Medicare Tax” in the search box for more information on Tier 1 Employee Additional Medicare Tax.
Enter the compensation, including tips reported, subject to Tier 2 Employee tax in the Compensation column. Only the first $88,200 of the employee's compensation (including tips) for 2016 is subject to this tax. Multiply by 4.9% and enter the result in the Tax column. For information on reporting tips, see Tips, earlier.
Enter any sick pay payments during the year that are subject to Tier 1 taxes, Tier 1 Medicare taxes, and Tier 1 Employee Additional Medicare Tax withholding in the Compensation column. Multiply by the rate for the line and enter the result in the Tax column for that line. For Tier 1 Employer taxes, the total amount listed in the Compensation column for lines 1 and 8 combined may not be more than $118,500 per employee. For Tier 1 Employee taxes, the total amount listed in the Compensation column for lines 4 and 10 combined may not be more than $118,500 per employee. Tier 1 Medicare taxes aren't subject to a dollar limitation.
All compensation (including sick pay) that is subject to Tier 1 Medicare tax is subject to Tier 1 Employee Additional Medicare Tax if paid in excess of the $200,000 withholding threshold.
If you’re a railroad employer paying your employees sick pay, or a third-party payer who didn't notify the employer of the payments (thereby subject to the employee and employer tax), make entries on lines 8–12. If you’re subject to only the employer or employee tax, complete only the applicable lines. Multiply by the appropriate rates and enter the results in the Tax column.
Enter on line 14:
A fractions-of-cents adjustment (see Adjustment for fractions of cents, later);
Credits for overpayments of penalty or interest paid on tax for earlier years; and
Any uncollected Tier 1 Employee tax, Tier 1 Employee Medicare tax, Tier 1 Employee Additional Medicare Tax, and Tier 2 Employee tax on tips.
Enter the total of these adjustments in the Tax column. If you’re reporting both an addition and a subtraction, enter only the difference between the two on line 14. If the net adjustment is negative, report the amount on line 14 using a minus sign, if possible. If your computer software doesn't allow the use of minus signs, you may use parentheses.
Don't include on line 14 any 2015 overpayment that is applied to this year's return (this is included on line 16).
An explanation of the item the adjustment is intended to correct showing the compensation subject to Tier 1 and Tier 2 taxes and their respective tax rates.
The amount of the adjustment.
The name and account number of any employee from whom employee tax was undercollected or overcollected.
How you and the employee have settled any undercollection or overcollection of employee tax.
Combine the amounts shown on lines 13 and 14 and enter the result on line 15.
Enter the total Form CT-1 deposits for the year, including any overpayment that you applied from filing Form CT-1 X and any overpayment that you applied from your 2015 return.
If line 15 is more than line 16, enter the difference on line 17. Otherwise, see Overpayment below. You don't have to pay if line 17 is under $1. Generally, you should show a balance due on line 17 only if your total railroad retirement taxes based on compensation for the year (line 15) is less than $2,500. However, see Accuracy of Deposits Rule, earlier, regarding payments made under the accuracy of deposits rule.
If you were required to make federal tax deposits, pay the amount shown on line 17 by EFT. If you weren't required to make federal tax deposits, you may pay the amount shown on line 17 by EFT, check, or money order. For more information on electronic payment options, visit the IRS website at www.irs.gov/payments.
If you pay by EFT, file your return using the address under Where To File, earlier. Don't file Form CT-1(V), Payment Voucher. If you pay by check or money order, make it payable to “United States Treasury.” Enter your EIN, “Form CT-1,” and “2016” on your check or money order. Complete Form CT-1(V) and enclose with Form CT-1.
If line 16 is more than line 15, enter the difference on line 18. Never make an entry on both lines 18 and 17. If line 18 is less than $1, we will send you a refund or apply it to your next return only if you ask us in writing to do so.
If you deposited more than the correct amount for the year, you can have the overpayment refunded or applied to your next return by checking the appropriate box on line 18. Check only one box on line 18. If you don't check either box or if you check both boxes, generally we will apply the overpayment to your account. We may apply your overpayment to any past due tax account that is shown in our records under your EIN.
This is a summary of your yearly tax liability, not a summary of deposits made. If line 15 is less than $2,500, don't complete Part II or Form 945-A.
If you’re a monthly schedule depositor, enter your tax liability for each month and figure the total liability for the year. If you don't enter your tax liability for each month, the IRS won't know when you should have made deposits and may assess an “averaged” failure-to-deposit penalty. See section 11 of Pub. 15. If your tax liability for any month is negative, don't enter a negative amount for the month. Instead, enter zero for the month and subtract that negative amount from your tax liability for the next month.
The amount shown on line V must equal the amount shown on line 15.
If you’re a semiweekly schedule depositor or if you accumulate $100,000 or more in tax liability on any day in a deposit period, you must complete Form 945-A and file it with Form CT-1. Don't complete lines I–V if you file Form 945-A.
If you want to allow an employee of your business, a return preparer, or another third party to discuss your 2016 Form CT-1 with the IRS, check the “Yes” box in the Third-Party Designee section. Also, enter the designee's name, phone number, and any five digits that person chooses as his or her personal identification number (PIN).
By checking “Yes” you authorize the IRS to talk to the person you named (your designee) about any questions we may have while we process your return. You also authorize your designee to do all of the following.
Give us any information that is missing from your return.
Call us for information about processing your return.
Respond to certain IRS notices that you have shared with the designee about math errors and return preparation. The IRS won't send notices to your designee.
You’re not authorizing the designee to receive any refund check, bind you to anything (including additional tax liability), or otherwise represent you before the IRS. If you want to expand the designee's authority, see Pub. 947.
The authorization will automatically expire 1 year from the due date (without regard to extensions) for filing your 2016 Form CT-1. If you or your designee wants to revoke this authorization, send the revocation or withdrawal to the IRS office at which you file your Form CT-1.
The following persons are authorized to sign the return for each type of business entity.
Sole proprietorship—The individual who owns the business.
Corporation (including a limited liability company (LLC) treated as a corporation)—The president, vice president, or other principal officer duly authorized to sign.
Partnership (including an LLC treated as a partnership) or unincorporated organization—A responsible and duly authorized partner, member, or officer having knowledge of its affairs.
Single-member LLC treated as a disregarded entity for federal income tax purposes—The owner of the LLC or a principal officer duly authorized to sign.
Trust or estate—The fiduciary.
Form CT-1 also may be signed by a duly authorized agent of the taxpayer if a valid power of attorney has been filed.
A paid preparer must sign Form CT-1 and provide the information in the Paid Preparer Use Only section of Part I if the preparer was paid to prepare Form CT-1 and isn't an employee of the filing entity. The preparer must give you a copy of the return in addition to the copy to be filed with the IRS.
If you're a paid preparer, enter your Preparer Tax Identification Number (PTIN) in the space provided. Include your complete address. If you work for a firm, enter the firm's name and the EIN of the firm. You can apply for a PTIN online or by filing Form W-12. For more information about applying for a PTIN online, visit the IRS website at www.irs.gov/ptin. You can't use your PTIN in place of the EIN of the tax preparation firm.
Generally, you’re not required to complete this section if you’re filing the return as a reporting agent and have a valid Form 8655 on file with the IRS. However, a reporting agent must complete this section if the reporting agent offered legal advice, for example, by advising the client on determining whether its workers are employees or independent contractors for federal tax purposes.
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